The Agrarian Question of Financial Landscapes: The Case of Ambon

Every agro-ecological situation implies a specific pattern of production and a particular combination of savings, borrowing and insurance behavior of producers. Likewise, the strategies and services of agricultural traders and other financial intermediaries depend very much on the agro-ecological situation. Soil conditions, cropping patterns, water supply and drought might have a strong impact on the nature and number of financial services in rural areas of developing countries. Predictability, periodicity and diversity of agricultural production directly affect decisions of producers related to savings, borrowing and insurance. Platteau and Abraham (1987) argue that credit has evolved as a hunger insurance mechanism in fishing communities in India as a result of daily fluctuations of fishing incomes: a fisherman with surplus income lends money to his less fortunate fellow fishermen, who are supposed to help him in return when short of money and food. Southwold (1990) describes how coconut evolved as the major form of collateral for credit for securing food in a period of drought, failure of the paddy crop and restricted money circulation in rural Sri Lanka. The regular and relatively predictable income from coconut proved a solid base for copra traders and shopkeepers to supply credit in cash or goods to farmers. Borren (1986) reports the existence of different flows and forms of credit in three ecological zones in the Great Scarcies Area of Sierra Leone, each characterized by a particular cropping pattern. Van Nieuwkoop (1986) finds that in Malaysia, “Paddy farmers who have an income that is generated only once or twice a year use more informal credit than rubber farmers who have a much more regular income” (p.60). These observations would lead one to expect that the relationship between particular agro-ecological conditions and savings strategies, credit transactions and redistribution of risk, has been the subject of much research and policy debate. However, only a few empirical studies have explored this relationship, and it is questionable whether their findings have influenced policy debate at all. Of course, this question is only one of many issues which arise in the field of rural finance, that is, the complex of decisions of individuals and groups regarding insurance, savings and credit; services of financial intermediaries; and existing relations and conditions that affect these decisions and services (cf. Schmidt and Kropp 1987). However, even at a time when the role of agricultural credit as a development tool was widely discussed, this “agrarian question” was hardly addressed (AID Spring Review of Small Farmer Credit 1973). Yet the considerable difficulties in defining “the small farmer” would have provided ample reason to do so. Rice (1973) mentions that, “no single satisfactory definition is available to distinguish small farmers from medium and large farmers in all parts of the world” (p.3). However, this conclusion was not followed by a call for a more contextual approach of the credit problematic that takes into account location-specific ecological and agroeconomic environments. Instead, Rice reassures us that: